Brick and Mortar...Been there, done that!

[HC_Charlie]

Do you have, or had a physical brick and mortar location for your retail business? After recently closing my store after five years, I'd like to put together some resources for other Sellers that may be just starting to plan or think about opening a brick and mortar location. Do you have any tips or suggestions that you found helpful, or wish you had known before your opened shop?

Some points that I wished I'd given more thought to include:

• Location! You've probably heard it before: location, location, location. And it really is true! I chose a very quaint store front in an enclosed walking mall, but the lack of road frontage exposure and other retail attractions became too difficult to overcome. I could advertise a TON, and it still was a challenge to get people to come visit, or even find the shopping center.

• Inventory costs! There's a retail concept called "open to buy" and I never really considered or understood this; the concept details how much inventory you can carry in your store, and how much you need to sell to turn over old inventory, so you can have funds available from those sales to purchase new inventory items. I was always struggling to pay off old inventory (so I carried debt) before ordering fresh, new seasonal items. I felt I needed to have a constant stream of fun, new items to keep regular customers coming back. But in the long wrong I wasn't selling enough to restock so frequently.

• Have a profit plan in place. If you don't make sure you pay yourself first, you'll never see a paycheck or see the benefits from all of your hard work. There was a great featured book in the Square Readers Book Club earlier this year called Profit First by Mike Michalowicz. You can read about it here; if you're not signed up for the book club, give it a try! The book helps you make a plan to set aside your profit before taking care of other expenses.

So, what is the best advice you'd give yourself if you were opening a brick and mortar location all over again?

[maxpete]

Thanks for starting this conversation, Charlie! Definitely super important to talk about. 

Also, thanks for the Book Club mention. I know that @Pesso will be happy about that 🙂 

Tagging some Sellers to weigh in with their experience @Jessica-Gaucher, @Colemanzd, @mattsdugout, and @cymru78!

[cymru78]

Be prepared to spend!

And not just on equipment and stock to get you up and running.

You'll always find that you need something else and much of that will come from new ideas the more you build.

At some point, you'll think that you finally have everything you need. Don't believe it!

Budget

With my bank, I can set up 'Spaces' and I can have money automatically transferred to those spaces. Work out your daily rent and put that in a 'space' every day but always add a little bit extra for a 'rainy day'. I've got 3 main spaces set up. Rent, Tax/National Insurance and personal wages so that I can make sure I pay myself a minimum amount each month.

You will have quiet days

You will likely have days where you don't get any customers or any sales. It can get you down so accept that you won't take money every single day. Use that time to keep yourself busy - work on your website - look for potential new suppliers - do some marketing

It might not work out

There's a chance that your bricks & mortar venture won't work out. If that happens, hold you head up high and say 'at least I tried'. Maybe it just wasn't the right time.

If you are a seller that also sells online, keep it up. Another chance to have a bricks & mortar shop might come along later down the line.

-----------------------------------------

I've only had my little shop for almost 2 years (trading for just over 3 years) I've had very quiet days. I've had very busy days. Where I live, it's better in the summer because it's a seaside town but I do have quite a few local regulars. It's really nice to see the regular faces just as much as new faces.

It takes a long time to make a profit and I'm only just starting to see things moving in the right direction.

Be patient. Don't give up right away.

Keep at it!

[GailBOM]

I love your budgeting idea of setting up "spaces". Working out the daily expenses and setting those aside is SO smart. I think that will be my mission for today.

[EcoAutoClean]

It's a very good idea..it helps me so much! I actually do this using Square with the same way Square capital is paid back. Ive created folders to automate percentages of each transaction so when I'm ready to re order - the funds have already been set aside. Makes planning much easier!

[Doran]

It might not work out! 

This is so important to remember going in.  It doesn't mean anything is wrong with you.  It just didn't work.  Pandemics.  Recessions. Neighborhood rezoning.  Sometimes it just doesn't work because of things out of your control.  It is ok to go back to the drawing board and figure something different out.  

Businesses are constantly evolving and you have to stay ahead of that.  It is exhausting but trying to force something is soul-crushing.  Learn to recognize the difference.  

[AdamB]

This is good advice for life in general in addition to a business, honestly. 😛

[HC_Charlie]

wonderful insights @cymru78 thank you. I can relate to everything you say here, especially the "down days". It's good to have a plan to work on something business related to stay business and keep moving forward. I closed my store after 5 years, but I feel like I've learned some very important business skills, it's like on the job training. I hope your business continues to do well and grow.

[GailBOM]

This is a great thread! I've had a bookstore for 5 years now and am at a turning point of either selling the store or really digging in to learn how to make  this work. I definitely have to learn about "open to buy" as I also suffer from compulsive book buying disorder to have new, interesting reads on the shelves.

[HC_Charlie]

Thanks for your post @GailBOM , I understand about having to evaluate and either continue forward to close up. I decided to close up after 5 years, mainly because I was carrying a lot of debt over those 5 years and I wasn't seeing a way out of it since keeping the doors opened would have continued to create expenses. As far as buying a lot of stock, I suffered the same issues you are dealing with. I felt like a bonus to having a store was that I was a "professional shopper" and would pour over catalogs and websites buying everything that I thought was cool, even if I didn't have a plan to sell it. One thing to try is to move stock around frequently, and regroup different items together. Make some themed corners or tables, especially around authors, subjects, or current events/holidays. I found many customers only see a fraction of the full inventory, and moving items around frequently make the store seem fresh.

Do you carry just new books, or used books? You could explore a program where customers could trade back in gently used books they purchased from you, for a credit towards their next purchases. That way you could move inventory, create a Used Book section, and keep customers coming back. You could also maybe use Square Loyalty program and award points for buying back used books. Just a few thoughts. I hope your business continues to do well, and that you gain some clarity on how to move your business forward.

[cymru78]

Just going on what @HC_Charlie said

There is an independent bookshop near my shop. They only (mostly) sell used books for really cheap. They stamp the inside of the books and when they get returned, you can exchange it for another for half price.

They also buy and sell used jigsaws.

[TCSlaguna]

Determine the optimal size. 

We went from 800 sq ft to 2500 sq ft. Our current retail space is in a great location (Pacific Coast Hwy) with tons of traffic, but we always knew we would have a hard time filling up that much space. So we do not fully utilize the vertical height we could with tiered displays. We will likely need to move somewhere with 1200-1500 sq ft in the next year. 

Thanks for starting the discussion @HC_Charlie 

[HC_Charlie]

@TCSlagunahave you ever considered creating a "co-op" area of your store with different vendors? Or carve out event spaces? I think you may do or have done readings, etc. at your store? Store size really is important to think about, and I know some will calculate "profit per sq foot" and things like that, although that's more involved than I ever got into.

[TCSlaguna]

We have not thought about co-op space. Interesting idea! 

We actually have been discussing putting a wall up on the back third of the store for an event space. We have been trying to figure out how much revenue we could generate with our own events, and how much from third-parties. It is one more element to manage (and planning and promoting events tend to be a lot of work), but there may be a need for an event space in our area, so it may pan out. 

Thanks for the ideas @HC_Charlie !

[cymru78]

I don't know if it would work where you are, but another option could be 'Shelf Rental'

The idea is to offer shelves (or just some space) for rent to fellow small businesses for x amount per month and you sell their stock for them.

[Twpchair]

We have many vendors that rent space, or booths in a couple big stores here. They pay rent or commissions and good to go! I started out doing that 14 yrs ago or so. It was great. 

[TCSlaguna]

@HC_Charlie  @cymru78  @Twpchair  Thank you for the great ideas. I was wondering, how would I find potential vendors? We have different pop-up fairs in the area. Would that be the best place to approach vendors? Or is there a good site to post availability? I suppose our social media page would be a good place too...

[HC_Charlie]

I'd put something out in your customer list...a lot of your current customers may also be vendors/makers of the same items or companion items in your shop...or ask them if they know a friend who's looking for sales/exhibit space.

Here's an idea: You could first do a trial test run; this would be a bit of extra work, but it could be insightful to see if this would work for you...create your own in-store event, using the extra space in your store. Market it as a vendor or maker fair, you would section off areas in your store and "sell" space. Google "running a craft show" for specifics. But you'd invite sellers in for the event, market the date, and hope you get a turnout. From those results, you could ask certain vendors if they'd want a more long term leasing space within your store for their items.

It'll take some time to figure out what items may work best, so you're not directly competing with your own items. I used to have several people a week come into my shop and they would ask if I take consignments from artists; I never went that route in my store, but I think there is a market for it.

[TCSlaguna]

I LOVE the idea @HC_Charlie 

Thank you SOOO much! 

[Twpchair]

Hun, honestly, they did, and I the power of Facebook! You wouldn't believe how many people do crafts and art and just looking for a place to display it! I stopped last year with 100 people looking for a booth or consignment for their stuff. My building is 12,000 sq ft, and my husband said you will never fill it. What are you doing? 2 weeks later, 107 vendors and the plus of that is they pay my lease and utilities! Just make sure what you charge them covers all the lease or rent and bills. It is extra paperwork, but I was able to also cover 2 employees to do that! Our customers love the variety of new items and hand built items and antique and unique items. I've had customers tell me they have never seen a store like ours in all of Michigan, let alone Central rural Michigan! I refer to the movie field of dreams. If you build it, they will come, and they do! Our first year in our new store, we did 287k in 6 mths! My husband said I apologize!"" 😆 🤣 😂 it is a lot of drama. I won't lie with all women and 2 men (BTW, my 2 men) are the easiest! But it has been such a joy with our regular customers who come in and buy a new couch but can also buy a late 1800 desk. The mix of new and old is really popular here. I wish you all the best and, above all, enjoy! Vendors are there, I promise! I couldn't believe the artists that were there but no place to display it! With them having their own booth is like having their own little store. I'm excited for you!!!!

[HC_Charlie]

@Twpchairwhat a great story, I'm glad you've found success! I often thought about the idea of consigners, but when I had my store I decided to be a firm "NO" for that. I bought everything wholesale myself. The big reasons why I stayed away from consignment (and maybe part of the drama you reference LOL)...

• I was fearful of consignors coming into the store every day or two, and bugging me with questions like "did anything of mine sell yet??? Is anyone asking you about my work??? Why aren't you promoting your store/my store more with advertising?? Why weren't you open yesterday??? etc. etc. etc.
• I was also fearful that by "leasing" space in my store, the artists would feel entitled to tell me specifics on how to run my business, advertise, store hours, other competing artists, etc.

It is GREAT to offer artists this type of arrangement, and myself as an artist have participated in consignment shops. I'd like to think that I was the kind of person like your easy men LOL, but I think some other artists are more demanding. There are naturally different personalities in this world, and working in retail we usually come across most every kind of person! It takes patience and grace to get through it 🙂